As many have most likely seen or heard on the news, Ireland’s budget for 2016 was announced on the 13th October 2015. While most are saying the budget is looking “economically positive” for Ireland, it may not be going far enough in its role within the construction (and insulation) industry.
In this post we’ll take a look at a few of the announcements, what they mean for construction, and some new additions to consumer programmes that may help increase uptake of the Government’s insulation grants and energy efficiency schemes.
Housing Will See Additional Funding
Budget 2016 saw a number of new additions and increased funding to social housing programmes. The Social Housing Strategy 2020 will see funding of €811m, with Local Authorities committing to around €112m to help ease social housing requirements.
€4.5 billion Euro in funding will be allocated to NAMA to help increase Ireland’s housing stock. The target set is 20,000 residential homes by the year 2020, with 90pc being built within the Greater Dublin Area alone. NAMA (National Asset Management Agency) will work directly with housing developers to reach the target, with some 75pc built being residential starter homes.
There will also be a push and additional funding to try and help meet social housing requirements around the country. The funding includes an increase to €414m (from €69m) to provide accommodation to 14,000 households. This breaks down to 3,100 units in 2016 and 9,500 by 2018. Local Authorities will be responsible for providing roughly 1,000 units.
Additional schemes worth mentioning includes a Housing Assistance Payment, Rental Accommodation Scheme and mortgage-to-rent scheme totalling almost €200m. The government will also introduce an additional €70m in funding to help upgrade the energy efficiency of its current social housing stock. Disadvantaged communities will see 1,500 units refurbished to make them suitable for occupancy, budgeted for €85m in 2016.
Housing Remediation Schemes
In addition to the funding being provided to NAMA and for social housing, other housing remediation schemes are in the budget for 2016. This includes the following:
- €45m provided to upgrade homes for older persons or those with a disability as a housing adaptation grant
- A Pyrite Remediation Scheme to remedy homes built with pyrite, totalling €19m
- A Lead Remediation Grant Scheme to assist homeowners in removing lead from drinking water
Home Renovation Incentive Extended
Initially expiring 31st December 2015, the Home Renovation Incentive has been extended by another year. The HRI incentive provides homeowners and landlords an Income Tax Credit of 13.5pc on eligible works for repair, renovation and improvement works costing at least €4,405 to a maximum of €30,000 before VAT. The incentive is now set to expire on 31st December 2016, giving homeowners at least another year to take advantage of the tax relief.
PAYE taxpayers will see Income Tax Relief spread out evenly over pay dates for two years, while self assessed will see the tax credit over two years of assessments.
A Boost for Energy Efficiency and Renewable Energy Technology
€68m in funding has been allocated to increasing energy efficiency and the adoption of renewable energy, including research and development. The Department of Communications, Energy & Natural Resources estimates this funding will support up to 2,750 jobs for 2016. Notable mentions include:
- An increase in the budget allocated to the Better Energy Homes Scheme
- Increased budget allocated to Better Energy Communities
- Continued funding for the Better Energy Warmer Homes Scheme
- A new Renewable Heat Incentive for businesses in 2016
- Continued offering of grants for the purchase of electric vehicles, with an additional €1m allocated to keep up with consumer demand
- €4.5m budgeted for ocean energy research and development
Energy efficiency schemes in Ireland have seen a huge increase, with the Department reporting Better Energy Homes Scheme applications up 78pc, while Better Energy Communities were 300pc over-subscribed. An additional pilot scheme aimed at those with acute health conditions living in poorly insulated homes will also launch in 2016 as part of the Affordable Energy Strategy.
While many in the construction industry welcome the changes and additional funding, many, including the Construction Industry Federation, have expressed that the mesures do not go far enough, especially in the construction of new homes. CIF states that 20,000 new units by 2020 only equates to 25pc of Ireland’s annual demand. Costs and financing of new homes also remains a concern.
What are your thoughts on the Government’s budget announcement? Be sure to share your thoughts in the comments section below.